Will The Housing Crisis Win The Election?

The Politics Of Housing

It is still generally acknowledged by all political parties that there is a housing shortage in the UK, and each political party wants to offer the public alternative methods of tackling the problem in an attempt to win electoral favour.

Most political parties see the housing crisis in the UK as a possible election winning issue and each party’s election manifesto promises the general public many things, including further private rented sector (PRS) reforms and the introduction of additional legislation. There isn’t much offered by any political party for landlords, except for the promise to put an end to the private rental sector.

A recent survey by Ipsos MORI research published in January 2015 discovered a confusing conundrum, in that:

75% of the public agree that there is a housing crisis in the UK

48% of the public disagree there is a housing crisis in their locality

The publication of each political party’s election manifesto is intended to give the public a clearer indication of the housing priorities of the UK’s next parliament.

However, despite claims of a housing shortage nationally there are still some UK regions that have large proportions of derelict and abandoned properties, many still in a habitable condition.In parts of the North East of England there are streets of empty and boarded up properties that would welcome any type of tenant, but it appears that no-one wants to live there. Those tenants that already live in these types of area are becoming disillusioned and angry due to the lack of development and investment in their localities, forcing even more to relocate exacerbating the problem.

Large scale industry has long since vanished from areas like Easington, Horden, and Peterlee in County Durham but there is housing available and plenty of it! However with street after street full of boarded up properties, there isn’t much hope for property investment except from naive uninitiated investors, who soon discover the drawbacks of owning property in the area.

Surely offering homeless families and migrants who are new to the country, housing in such neglected areas, would alleviate some of the current burden on the taxpayer and provide landlords with enough rental income to meet minimal operational costs.

Politicians from the main 5 political parties have already made a number of promises to the British public on housing in order to influence voter sentiment, which are set out below.

Create New Homes Corporation to commission developers to build 200,000 new houses per year by 2020, funded by Government with private investment partners.

Increase number of small and medium enterprises (SME) house builders through new ‘help-to-build’ scheme, with HM Treasury guaranteeing low cost bank lending.

Introduce fast-track planning by local authorities on sites of less than 10 properties and include a higher proportion of smaller housing sites in their five-year land supply.

Home Owners

Introduce Right To Grow for local authorities in order to develop new garden cities, garden suburbs and new towns, delivering up to 500,000 residential properties, if the local authority has a housing need but are unable to meet criteria within their own boundaries.

Double the number of first-time buyers by 2025.

Make local authorities give preference to first-time buyers from the local area for new build housing sites.

Private Tenants

Introduce a national register of landlords;

Ban letting agents from charging fees to tenants

Introduce new legislation to make three-year tenancy agreements standard practice, with a ceiling on rent rises throughout the period of the tenancy.

Welfare and Taxation

Repeal bedroom tax legislation for social housing (under-occupation deduction from Housing Benefit for social tenants)

Introduce Mansion Tax for properties valued at over £2 Million (GBP

Allow local authorities new powers to charge double Council Tax on properties that are empty for more than a year.

Build 300,000 new properties per year by the end of the next parliament

Create at least ten garden cities where there is clear local support and private sector appetite

Establish Housing investment bank.

Increase local authority responsibility for allocation of land to meet 15 year housing needs through increased use of Local Housing Companies, allowing local authorities to invest outside of their Housing Revenue Accounts.

Home Owners

Designate 30,000 new properties as Rent-to-Own by 2020. Tenant rent payments used to build up ownership of the property over 30 year period.

Change the policy on Right-to-Buy, allowing local authorities to suspend the scheme in their area if they so wished.

Private Tenants

Introduce new three-year tenancy agreements through encouragement rather than legislation.

Reform bedroom tax policy by removing subsidy for new tenants in social housing. Existing social tenants not subject to housing benefit deductions until in receipt of a reasonable offer of alternative social rented accommodation with the correct number of bedrooms.

Tenants who need an extra bedroom for genuine medical reasons or whose homes are substantially adapted will not have their housing benefit reduced.

Require independent environmental impact assessments for large scale property developments and developments on green field sites.

Encourage more property self-build schemes, with unemployed people permitted to work on such schemes without the risk of benefit sanctions.

Home Ownership

End the existing Right-to-Buy and tenant discount on social housing

Allow individual local authorities to decide which, if any, properties should be sold

Introduce a ‘Right-to-Rent’ policy, with property owners threatened by repossession gaining the right to transfer the property to local authority ownership below market value (BMV) but then remain in the property as council tenants.

Private Tenants

Control private rental sector rental prices through the establishment of a living rent commission to set voluntary living rental prices.

Introduce new Council Tax bands above band H for higher value properties

Provide one-off grants for homeless people to move into unfurnished homes

Provide insulation grants for low-income households

Scrap mortgage interest tax allowance for buy-to-let mortgage holders

Phase out Council Tax in favour of a Land Value Tax

Remove bedroom tax from Housing Benefits

Landlords are the target for all political parties at this general election, and depending on who gets into power, there could well be a mass exodus on the cards which would certainly throw the whole of the private rental sector into disarray.

There isn’t a single political party who have the interests of business at heart despite all the election promises.